We reported last week that Softbank Corp. (TYO:9984) was in talks to acquire Sprint Nextel Corp. (S) for an estimated transaction price of $12.8 billion. There were no details given on the potential acquisition or the timeframe for its completion.

Sprint only provided the press with the following statement:

Sprint today confirmed that it is currently engaged in discussions with Softbank regarding a potential substantial investment by Softbank in Sprint. Although there can be no assurances that these discussions will result in any transaction or on what terms any transaction may occur, such a transaction could involve a change of control of Sprint. Sprint does not intend to comment further unless and until an agreement is reached.

Today, the news is official, and Softbank will pay $20 billion for a 70 percent share of Sprint. This is well above the $12.8 billion figure that was tossed around last week.

The $20 billion figure includes:

$8 billion in shares from Sprint ($5.25/share)

$12.1 billion in from current Sprint shareholders ($7.30/share)

The shareholders receiving over $12 billion in cash will get 30 percent ownership of the "New Sprint". Sprint, on the other hand, will use the $8 billion in cash to boost its LTE network.

“This transaction provides an excellent opportunity for SoftBank to leverage its expertise in smartphones and next-generation high speed networks, including LTE, to drive the mobile internet revolution in one of the world’s largest markets," said SoftBank Chairman and CEO, Masayoshi Son. "Our track record of innovation, combined with Sprint’s strong brand and local leadership, provides a constructive beginning toward creating a more competitive American wireless market.”

“This is a transformative transaction for Sprint that creates immediate value for our stockholders, while providing an opportunity to participate in the future growth of a stronger, better capitalized Sprint going forward," added Sprint CEO Dan Hesse. "Our management team is excited to work with SoftBank to learn from their successful deployment of LTE in Japan as we build out our advanced LTE network, improve the customer experience and continue the turnaround of our operations.”

Both companies expect the merger to go through in mid-2013 pending regulatory approval.

It's easy to offer unlimited data in Japan when your coverage area is 150,000 sq miles and the population density is more than 10 times that of the United States. Throw in plentiful, reliable, inexpensive Nuclear Power, a less moronic communications commission and twice as many data subscribers per capita than the United States and obviously their carriers can offer more for less.

As was previously mentioned on here, the urban areas of the United States don't even come close to carrying the costs of the rural area infrastructure which is why Dutch Telecom wanted out of our market in the first place, and why service costs are higher than just about anywhere else in the world. Sure, a lot of it is political, but we have the unique obstacle of covering a huge mass of land, where many places it is difficult to get reliable data and even electricity.